For ultra-wealthy entrepreneur Bassim Haidar, living in London has become an indulgence he can no longer justify. With new British Prime Minister Keir Starmer settling

into No. 10 Downing St, Haidar is now searching for homes in Greece and Monaco. He cites a proposed inheritance tax revamp as making Britain a "no-go" zone for the rich.

Starmer argues that the overhaul will make Britain's tax system fairer and raise funds for strained public services. While Haidar supports some reforms, he warns that the proposed changes could harm the economy by driving international business owners away, damaging Britain's reputation as an incubator for new firms.

The recently ousted Conservative government had outlined plans in March to phase out Britain's centuries-old "non-dom" tax regime, which spares wealthy individuals from paying tax on income earned overseas. In the run-up to its July 4 election win, Starmer's Labour party also pledged to scrap permanent reliefs for "non-doms" born outside the UK if they placed non-UK assets into a trust within 15 years of moving to Britain.

Now that Labour has returned to power, Haidar is urging Starmer and finance minister Rachel Reeves to reconsider these plans. He suggests a new six-figure annual tax on individuals with a net worth exceeding 5 million pounds ($6.52 million). Haidar estimates a 150,000-pound levy could raise an additional 4 billion pounds a year without triggering an exodus of the non-dom wealthy.

"The notion that the UK is simply too good to leave is incorrect," the 53-year-old Nigerian-born, Lebanese citizen told Reuters. "To be taxed so heavily on wealth generated outside Britain, perhaps years before people even moved to the UK, is unfair." He urges the government to engage with globally-mobile millionaires to discuss tax reforms that he believes could put UK jobs at risk.

Organizations like Patriotic Millionaires UK are also campaigning for annual wealth levies on the super-rich. They estimate that setting a 2% tax at a threshold of 10 million pounds a year would impact around 20,000 people, but could raise up to 24 billion pounds annually.

Investment firms, wealth managers, and private bankers who provide financial services to approximately 70,000 UK-based individuals with non-dom status are on high alert for the historic tax overhaul. The Labour government believes it can raise an extra 5 billion pounds a year by tackling domestic tax avoidance, but assessing how much more could be raised by changing tax perks on offshore trusts is more challenging.

"It is not possible to directly measure how much foreign income non-doms using the remittance basis have, and therefore what the potential tax base is," the independent Institute for Fiscal Studies (IFS) said in a March report. Britain has around 37,000 non-doms who opt to be taxed on a remittance basis, meaning UK taxes are not charged on their foreign income or capital gains unless they are remitted to the UK. According to the IFS, these individuals collectively paid about 6 billion pounds in UK income tax, National Insurance contributions, and capital gains tax in 2020–21.

Threats by the wealthy to quit unfriendly tax regimes are not new, and some wealth advisers believe London's status as a culturally diverse city with world-class schools will ultimately persuade the well-heeled to stay. However, Haidar prioritizes shielding his family wealth for future generations over the inconvenience of moving to another country.

Britain is likely to lose nearly one in six of its U.S. dollar millionaires by 2028, according to the UBS Global Wealth Report for 2024. The report cites the high base number of super-rich in the UK, the implications of the Russia-Ukraine war, and the lesser effect of Britain's decision to abolish its non-dom tax perks as reasons for the sharp fall. UBS forecasts the number of dollar millionaires in Britain will decline by 17% to around 2.5 million by 2028, while the number is expected to rise by 16% in the United States and France, by 14% in Germany, by 12% in Spain, and by 9% in Italy.

In its March report, the IFS noted "only limited evidence on how non-doms would respond to higher taxes."

Proposals to tighten taxation loopholes for the wealthy come as UK financial regulators intensify efforts to make Britain more attractive to global companies and investors. Last week, the Financial Conduct Authority unveiled a revamp of corporate listing rules aimed at enticing owners of promising private firms to go public on the London Stock Exchange.

Despite these efforts, Haidar has shelved plans to list his financial services firm Optasia in Britain and is exploring alternative listing venues in countries with more favorable tax regimes. "If those already here are now looking to leave, how can you even begin to attract new ones when the new system is set to be even more punitive?" he questioned.

David Lesperance, managing director of tax adviser Lesperance & Associates, warned that the government should not underestimate the ease and speed at which wealthy families could leave the UK, noting that countries like Dubai and Singapore are actively seeking to attract them. Several of his clients are considering relocation to up to 17 alternative tax jurisdictions, including Ireland, Malta, and Portugal.

"Wealth does not stay still anymore. It doesn't have to. The golden geese have wings and they will fly," he said. Photo by Joe D, Wikimedia commons.